Theoretical and legal aspects of defining virtual assets as the subject of illicit enrichment

Abstract

In the article are outlined the elements of the criminal offense provided for in Article 368-5 of the Criminal Code of Ukraine - illicit enrichment. The article focuses on the subject matter of this criminal offense, namely, virtual assets (in particular, cryptocurrencies and non-fungible tokens (NFT)) as a type of intangible assets. The study highlights the problem of the lack of a unified approach to the definition of terms in the field of virtual assets, such as «virtual assets», «cryptocurrencies», «cryptoassets», etc. As a result, Ukraine lacks a unified conceptual framework in the legislation applicable to legal relations on the declaration of virtual assets and criminalization of illicit enrichment, which leads to problems in law enforcement. In the article are analized the problematic issues of the possibility of criminal prosecution for violation of anti-corruption legislation and illicit enrichment with virtual assets, among which the following are highlighted: problems with assessing the market value of virtual assets due to market volatility and lack of analogues for NFTs, lack of standards and methodology for establishing the value of virtual assets, often insufficient professional knowledge of virtual assets and the principle of their operation by the parties to criminal proceedings. The article concludes with the author’s recommendations on how to overcome these problematic issues, namely: the need to harmonize national legislation with European standards, in particular, with the Regulation EU Markets in Crypto-Assets, to develop a methodology for assessing the value of virtual assets and to improve the procedures for their consideration in the course of qualifying criminal offenses and in the declaration process, to increase the number of professional staff, to improve educational programs for training of investigators, prosecutors, defense counsels and judges.